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Krugman points to some striking data in a U.S. Federal Reserve study, showing 47% of Americans do not have the money to meet an unexpected expense of $400 without selling something they own or borrowing. The is the 2nd year of this Federal Reserve study. It shows alarming information about the condition of retirement savings- about 30% of nonelderly Americans say they have no retirement savings or pension, and reported going without some kind of medical care because they could not handle the expense. About 25% say they or a family member experienced financial hardship this year.

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In a program of gradual change the new leadership under premier Li Keqiang steers China's economy in the new direction set by the DRC Report: China 2030 and the Third Plenum in Nov. 2013. New priorities listed under major Tasks in the annual work report by Li Keqiang place setting up deposit insurance at the top of the list. Policy changes include allowing cities to issue bonds directly to increase transparency in construction spending and control burgeoning debt.

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Bill Clinton, says about his foundation, in talking to voters in Detroit- " all we have done is save lives. If creating jobs and saving lives is bad, I guess you can zing me with it." He told another crowd in Durham, N.C, that he was tickled by Trump's comment that the Clinton Foundation was a "criminal enterprise." The criticism of the foundation hurts Mr. Clinton because of the lifesaving work it has done for AIDS, malaria and saving lives. The Clinton Foundation made the error of taking donations from overseas in the zeal for donations, which gave some critics an opportunity to smear the foundation. Another error was not to strictly separate the work of Bill Clinton from Hillary's work at the State Department. Even though in its activities it has been exceptional in its work. In poor countries like Haiti it has helped people overcome poverty. On one achievement alone the Foundation's work is exceptional- bringing HIV/AIDS medication at affordable prices to 11.5 million people in 70 countries. It has also worked to reduce obesity among American school children, and improved lives through its health initiative, including lives of farmers in African countries. George W. Bush did exceptional work in Africa for AIDS/HIV. Clinton's activities continue an American tradition of helping people in Africa's poorest regions.  In this case the funds raised aggressively by Bill Clinton during speeches, were used to save lives or improve lives. This has been lost in the criticism of the Clinton foundation, as if the good work done by George W. Bush for AIDS in Africa can ever be fairly diminished in the slightest way by criticism of the Bush family. ...

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Economist Paul Krugman points out the risks of a trade war in the tariffs announced for steel and aluminium by president Trump. Yet he accepts that he advocated stronger action on China's currency in 2009-2010 when the U.S. economy was weaker. In the past on the TPP agreement proposed by president Obama, Krugman said that it would have an insignificant impact as most of the gains on trade were already made. Here Krugman is critical of the language used by president Trump about trade wars being "easy."  This is taken out of context though as president Trump is saying that it is easy in the context of a country enjoying a $100 billion surplus with the U.S., because that country is going to have incentives to maintain a good trading relationship with the U.S. Essentially this means that the steel industry in the U.S. benefits. China also benefits as it closes many of the older steel plants that led to overproduction. This would reduce overcapacity in China's steel industry, a problem China's economic planners see as a priority. China already is making the shift to higher technology products and this process will be accelerated, as it puts less emphasis on steel and metals as it did in its earlier stage of development. As a result contrary to textbook economics this has the potential to be a win-win solution for the U.S. and China in the long run. So little was done under the Bush and Obama administrations to manage trading relationships with other countries so that the interests of small communities across the U.S. were protected from unfair trade- that Reagan administration trade expert Robert Lighthizer took up the cause of the U.S.,workers in these communities. Surveys showed U.S. public opinion also had shifted among educated, professionals and middle class on this issue by 2015, against unfair trade that hurt U.S. interests. Robert Lighthizer is now the Trade Representative for the U.S. in the Trump administration. Reports in the WSJ about the discussion within the Trump economic council, show Gary Cohn favored not imposing the tariffs on steel and aluminum. Lighthizer advocated the tariffs and was able to convince the president.  For Trump this presents a win-win situation, as a mild response by China -and other trading nations that have enjoyed a favorable situation in the past -with its huge surplus and favorable trading relationship with the U.S. would present a win for the president. Economist Krugman accepts this when he says tariffs in the current context of the trading field- that is more favorable to other countries- are not such a big deal, only the use of such policy that is likely to endanger world trade.  As in much of the debate that takes place this adds to the headlines today yet provides delayed and limited relief to communities across the U.S. devastated by world trade as documented by experts who studied trade patterns and their effect on regions across the U.S.  As the WSJ points out in one report the trade deficit itself may continue to grow under president Trump because of other factors. The U.S. dollar surged 8% during the last 2 years of the Obama administration with the economic recovery underway. With Trump's election win the dollar surged another 3%. This may play a bigger role in the direction of the trade deficit than the new steel tariffs announced by president Trump. Workers and unions matter. As TPP pushed by Democratic party president Obama was opposed by the unions, and by the auto industry (workers and auto companies) in the midwestern states which suffered a hollowing out in the last decade. A WSJ survey after the election showed Clinton received 56% support from union workers in 2018 compared to 65% for president Obama in the 2012 election. Some of that erosion in support may come from Obama's TPP stand fervently opposed by the unions and workers in the auto industry. A similar situation took place in Ontario with hollowing out of the auto industry in this large industrial state in Canada and led to the rejection of the Conservative government and election of the Liberal Party under Justin Trudeau. This lesson is so far lost in the Democratic Party's debate.     ...

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Finance Minister Joaquim Levy, a University of Chicago trained economist, is replaced by planning minister Nelson Barbosa, as the new Finance Minister of Brazil. President Rousseff faces criticism as Brazil's economy contracts and ordinary Brazilians feel the effects of fiscal austerity policies pursued under Levy. Former president Lula da Silva was critical of Levy's policies.

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As expected Iran boycotts the talks in Doha of 16 major oil producers seeking to stabilize oil prices. Saudi Arabia, Russia, Qatar and Venezuela sought to stabilize oil production at January levels to support oil prices. Wth the Saudia and Russia producing all out, Iran seeks to do the same, effectively closing the door on any agreement to freeze production levels.

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Energy Aspects, London based consultancy, estimates non-OPEC production declines of 700,000 barrels a day, up from previous forecasts of 200,000-300,000 barrels a day. Demand is expected to be higher than supply by June 2016, and drawing down inventory from that time. Agreement to freeze production is uncertain at a Doha meeting of OPEC countries, with Iran planning to increase production from 3.1 million barrels a day currently to 4 million barrels a day. Saudis increased production to 10 million barrels a day in 2015, and Iran is determined to increase its production to the higher level. The price of U.S. oil rebounded to $42.17 by April 2016.

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Chrysler reported second quarter 2012 income of $436 million, compared with a loss of $370 million in the prior year quarter. The prior year quarter included charges for repaying U.S. government loans. First quarter 2012 income was $473 million. Fiat reported a loss of 246 million euros for the second quarter 2012. The combined operations Fiat-Chrysler reported aloss of 103 million euros. This shows how the effort by Sergio Marchionne to takeover Chrysler and turn it around have proved to be a very successful move for Fiat. With a relatively small investment Fiat is now a majority owner of Chrysler having invested mainly its management knowhow and leadership.

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German chancellor, Angela Merkel, appeals to members of the Christian Democratic Party to support the European project at a party convention in Leipzig on November 14, 2011. "We live in times of epic change. Our political compass has not changed. But the context is constantly changing," said Merkel. The 2 day convention used the motto: "For Europe. For Germany." Her message was that it will take years of hard work to fix the crisis and yet this has created an opportunity to put the European project on a sounder footing. Finance Minister Schauble put it succintly as he supported Merkel's appeal: "We now need to build the political union in Europe we never managed to build in the 90's." This comes as changes are taking place in Europe with new unity governments being formed in Greece by Mario Monti, a former EU commissioner, and in Greece by Papdemos, another EU official. And it comes as a head of Italy's central bank, Mario Draghi, who had pushed for stricter controls on spending by the Italian government, is now the head of the European Central Bank. Merkel also hit on the theme of a stricter financial union, and the need for courage to change the treaty underlying the European monetary union to allow strong, automatic sanctions for violations of the treaty. She also emphasized that the government had ruled out issuance of eurobonds that makes the EU as a whole responsible for the debt of individual countries. On that point she said: "Everywhere we look we find behaviour that cannot go on for long. Everywhere people are living as if there is no tomorrow."...

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According to the General Accountability Office inquiry, 28 drug products had price increases over 100% in 2000, in 2008 71 drug products had such large increases. Medicines like Adderall for attention deficit disorder, Inderal for chest pain, Sumycin for infections were in the list of 416 brand name drug products where makers or distributors raised prices at least once by 100% or more for period 2000-2008. As large pharmaceutical companies sold their marginally profitable drug products or small selling products to smaller companies, these smaller companies would immediately increase prices to recover the money they paid to the large pharmaceutical companies. 26 of the brand name products saw prices raised 10 fold. A third of the drugs with large price increases treat depression and disorders of the central nervous system.

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Germany is turning nationalistic in its approach to the debt crisis in Greece. This comes as Germans consider economic successes as Germany's, and failures in Europe, as the problems not of a united Europe but of these individual countries. The largest circulation German newspaper, Bild, suggested Greece sell the Acropolis to payoff creditors in the bond markets, and putting a estimate of $140 billion for this monument. A senior member of Merkel's party suggesting Greece sell off some of the Aegean islands. And a Bild poll showing a majority of Germans favor expelling Greece from the euro. There is not sufficient acknowledgement by German public opinion of the value to Germany of the export markets in Europe and the part they played in Germany's economic success.

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Controversy about whether bringing back a revamped Ford Explorer is a good idea. Ford's Farley thinks Americans might still consider an Explorer with high fuel economy, getting it up to 28 mpg from 15 mpg. But the evidence is that Americans have soured on SUV's. Consider that during the cash-for-clunkers program more Explorers were scrapped, and by a large margin, than any other model. Sales are down from 450,000 at one time to 52,000 today. To get buyers to look at the Explorer Ford is trying to change the looks from boxy to sleeker car-based crossover , and add high tech features. In fact it is going to be built not as an SUV, but on the same architectural base as the Taurus.

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The facts that guide one's understanding of what is happening in Greece relate to the size of the public sector for a small country like Greece, and the failure of people from all classes of society from cab drivers and civil servants to small business and the shipping industry, to pay taxes. These two twin facts and a splurge of spending during and after the 2004 Olympics without proper and correct account keeping, has brought Greece to its present situation. One estimate is that every Greek person would owe 27,000 dollars, that is how much the national debt has swollen to- a massive 300 billion euros debt for a small country. This is 115% of its GDP. And the public sector spending simply went unchecked by different governments trying to win votes. Estimates are that the public sector makes up 40% of Greece's GDP, and government workers are 15% of the active workforce. Not paying taxes has become a societal trait in Greece, as a result the government does not collect an estimated 25 billion euros a year in taxes each year. And this does not include the taxes that would be paid if owners in the Greek shipping industry were to not take advantage of an exemption from paying taxes granted by the government. The result- Greece's socialist government of Prime Minister Papandreou has accepted a $110 billion euro bailout from the European Union and the IMF which comes with cuts in public spending and austerity measures designed to reduce the deficit form 13.6% of GDP to 3% in 3 years. Its important to understand what is happening in Greece, because from Prime Minister Cameron in Britain (with his cuts in government department spending of 25% over 5 years), to Prime Minister Naoto Kan of Japan (with a planned doubling of the sales tax), the mood in Europe and Japan is shifting to austerity measures that would correct excessive government spending. In Greece Papandreou and his ministers are making serious efforts to change a culture of not paying taxes. See the groups and links for Papandreou and Greece....

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Are high prices for pharmaceutical products and healthcare services putting a severe burden on U.S. finances and defunding education, infrastructure, R&D in new technologies, which provide the underpinnings for future U.S. competitiveness? Yes say experts. In 2009 Americans per person cost of healthcare was $7,960. By comparison Canada was $4,808, Germany $4,218, and France $3,978. And without necessary efforts for educating people about caring for health and preventive care, the health conditions of Americans are no better than these countries, and poorer in some dimensions. Klein says deficits would not be a problem for the U.S. if prices for pharmaceutical products and healthcare services in the U.S. were similiar to that of the largest developing countries. Experts say the Obama healthcare law simply postponed the addressing of this problem.

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Greek leader Alexis Tsipras of the Syriza party, the Coalition of the Radical Left, talks to Angelos and Granitsas of the Journal. He says it is in the interests of the European Union to continue funding to Greece, but if the EU stops the funding Greece will stop paying its debt. It will then use the funds going to the debt burden for paying retirees and workers. And it will also tear up the loan agreements signed earlier, and scrap plans for layoff of 150,000 workers in the government services by 2015. He would also reverse measures to lower private sector wages. He also looks favorably on nationalizing banks to better channel lending to where its needed. In his view it will be difficult for Greece either way. Even with funding Greece's GDP is expected to fall 5-7% in 2012, following several years of declining GDP.

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Commodities prices hit a low in June before the second Greece election on June 16, with lower unemployment numbers in the U.S. and growth of 6-7% in India and China. Still average prices of oil in 2012 of $115 a barrel are higher than the level in 2011. And corn prices dropping to $5.25 a bushel are still high compared with prices earler. Corn farmers in the U.S. are adding to acreage. The relatively lower prices also give more room for smaller stimulus by central banks to stimulate growth. Freeport-Mining CEO, Richard Atkinson said in a presentation that the growth is coming on top of a bigger baseline for China, India and Brazil. China's copper consumption went up by about 6 million tons a year, averaging 13% growth a year in the period 1995-2010. Now even with slower growth at 6% a year, by 2025 he estimates China's copper consumption at 9 million tons per year. This is a structural change that is supporting commodity prices, says Amrita Sen, analyst at Barclays Capital.